Toboggan Entrance

Toboggan

The Toboggan Project is a group of gold exploration prospects covering 106 unpatented mining claims north and northwest of Murray, Idaho. The property covers an orogenic gold system with structurally-controlled zones occurring primarily along a northwest-trending corridor.

The prospect was discovered when sampling by Newmont revealed a gold-in-soil anomaly roughly 700 meters by 300 meters. Follow-up rock sampling returned values of up to 2,130 grams per tonne (gpt) gold and more than 500 gpt tellurium. Gold mineralization at Little Baldy exhibits typical association with tellurium found elsewhere at Toboggan. Five other surface rock samples from different locations averaged 26.6 gpt gold and 165 gpt tellurium.

The lease has a 20-year term and calls for annual payments to NJMC of $24,000, escalating to $36,000 after three years and $48,000 after six years. A work commitment of $200,000 by the third year is required of Hecla with increasing work commitments thereafter. If gold production is realized from the leased claims, a 2-percent NSR royalty is due to NJMC.

In 2009, Newmont completed a 6-hole, 1,359-metre core drill program including two holes each at the Gold Butte, Mineral Ridge, and Golden Reward prospects. The best intercept occurred at Gold Butte where a near-surface pyritic quartz vein assayed 2.5 gpt gold over 4.0 meters. Thick intercepts of anomalous gold mineralization were drilled at Mineral Ridge and Golden Reward.

In 2010, Newmont completed eight shallow core holes and seven shallow RC holes. Six core holes were drilled at Gold Butte, intercepting a fault with anomalous gold mineralization. Two core holes were drilled at Mineral Ridge but were terminated due to difficult ground conditions. The RC holes were drilled at various locations near Toboggan Creek, on the Golden Reward, CA, and Snowslide, prospects, also returning anomalous gold. Newmont obtained permits to drill its best targets after the 2010 exploration season ended.

Individual Gold Prospects

The Gold Butte prospect has historic workings that include seven adits connected by a system of narrow roads. In 1941, ASARCO collected nine samples from within the workings, yielding an average grade of 6.4 gpt gold. The mineralized zone at Gold Butte outcrops over a strike length of at least 200 meters with a vertical extent of 120 meters. Soil sampling indicates the zone may continue north for at least another 400 meters, with a 75 to 90 meter width. Rock chip samples from Gold Butte have assayed up to 32.6 gpt gold in quartz vein and sulfidic breccia.

Historic workings at the Mineral Ridge prospect include six adits and several pits and trenches. In 1991, soil sampling by Nord-Pacific led to the discovery of a gold anomaly 1,650 meters by 240 meters. The next year it completed a 9-hole, 850-meter RC drill program with each hole intercepting mineralization ranging from anomalous gold to a 1.5-meter intercept of 18.9 gpt gold. More recently, NJMC discovered and mapped an additional eastern zone. A sample of quartz-pyrite float from this zone assayed 38.4 gpt gold, 19.6 gpt silver, and 61.4 ppm tellurium.

The Golden Reward prospect was identified by soil sampling that outlined an area 400 meters by 240 meters. A second mineralized zone, along with several smaller gold-in-soil anomalies, was discovered by soil sampling east of the main zone. High grade float contained visible gold and telluride minerals, assaying up to 67.6 gpt gold and more than 100 gpt silver.

In the 1980s, Cominco-American discovered a large geophysical anomaly, now called the CA prospect, covering about two square kilometers at a depth of 450 to 670 meters below surface. Cominco-American subsequently drilled a 500-metre hole, but did not intersect the anomaly.

The Progress prospect features old workings, prospect pits, and outcrops. The 40 samples taken at Progress by Newmont included assay values of 73.7 gpt gold and 54.6 gpt tellurium from a mine dump sample and values up to 42 gpt gold were obtained from prospect pits. Newmont was unable to drill its targets at Progress in 2010 due to permitting delays.

Gold mineralization at Toboggan often occurs in structurally controlled zones within the Prichard and Burke formations and may be associated with large structures such as the Murray Peak, Bloom Peak, and Niagara faults. Gold mineralization can occur as discrete, high-grade quartz veins or within wide zones of brecciation. Geochemical analysis has revealed high tellurium levels associated with zones of higher grade gold. The presence of telluride minerals along with alkaline intrusive rocks and areas of potassic alteration has led the Company to believe the gold mineralization may be associated with yet unseen alkaline intrusions.

The Toboggan project is available for option or joint-venture with a qualified party.